Economics · IS-LM Model
An increase in money supply has a small effect upon equilibrium output when:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1the demand for money is interest-insensitive and investment spending is interest-sensitive.
- 2the demand for money is interest-sensitive and investment spending is interest-insensitive.✓
- 3the demand for money and investment spending are both interest-sensitive.
- 4the demand for money and investment spending are both interest-insensitive.
Correct answer
the demand for money is interest-sensitive and investment spending is interest-insensitive.
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